Scaling up energy storage—revenue opportunities in Great Britain
Produced in partnership with Andrew Hedges and Kathryn Emmett
Scaling up energy storage—revenue opportunities in Great Britain

The following Energy guidance note Produced in partnership with Andrew Hedges and Kathryn Emmett provides comprehensive and up to date legal information covering:

  • Scaling up energy storage—revenue opportunities in Great Britain
  • Price arbitrage
  • A regulated return?
  • Grid services
  • Capacity Market
  • Revenue stacking
  • Hybrid projects where renewable generation is co-located with storage
  • Future opportunities?

The revenue streams for a storage project will depend on the relevant electricity market, technology, project size and whether the project is applied ‘behind’ the meter to serve the needs of a specific site or connected to the grid. Storage is typically able to capture value in some or all of the following ways:

  1. the provision of grid services (frequency response, Capacity Market revenues, demand-side response)

  2. market price arbitrage,

  3. the smoothing of generation output and avoidance of imbalance costs in a hybrid project where an underlying (and typically intermittent) electricity generation facility is co-located with a storage facility

These forms of revenue are all explained in more detail below.

Investors will want the flexibility to ‘stack’ (ie combine) revenues, perhaps relying on different income sources at different times of day or year, while debt financiers will be looking for a longer-term base contracted revenue-stream to under-pin the debt repayment and/or assessing the management experience and creditworthiness of the corporate entity.

In Great Britain (GB), despite support for more flexibility in power networks, regulatory change is affecting the business case for new storage assets. In this Practice Note we examine the revenue sources and the potential impact of regulatory change on stand-alone grid-connected storage assets. For more detail on the regulatory regime for storage in GB, see Practice Note: Energy storage—the evolving regulatory regime and

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